EU will launch new VAT rules and import one-stop systems

Since July 1, 2021, the exemption from VAT on imported goods by 27 EU Member States will change. According to the tax exemption rules, goods with a value of 22 euros or less can be imported duty-free. Now, no matter how much value, all imported goods are subject to EU VAT.

The EU VAT rule is a general tax applicable to goods and services sold for use or consumption in the EU. These products are taxed when they are imported, mainly to maintain the fairness of the market to EU producers, so that they can compete equally with other international su ppliers.

EU VAT law only requires each country / region to apply a standard tax rate of 15% to the supply of goods and services. Therefore, the tax rate varies with EU member countries and different products. To obtain the latest information about the VAT rate of a specific product country / region, it is best to consult the VAT authorities of the authorities.

The system aims not only to make the procurement process simpler and more transparent, but also to speed up the transportation and customs clearance process. This is because suppliers under IOSS will be responsible for collecting, reporting and prepaying EU VAT from the relevant authorities, rather than paying VAT separately by the buyer (as was the case before when the goods had been imported).

This is good news for e-retailers that sell products to EU customers through online markets such as eBay or Amazon. Under the new IOSS scheme, they may no longer be responsible for collecting and paying VAT. For IOSS, as part of the transportation process, the market is responsible for collecting and paying VAT.

In essence, if your business imports consumer goods with a value of no more than 150 euros from outside the EU, then using IOSS is good for you and your customers.